34 CHAPTER 2 UNDERSTANDINGANDAPPROACHINGTHEMARKET
competitorsintheeyesofcustomers.Examplesoftangihledifferencesmightbeproduct
features,performance,endurance,location,orsupportservices,tonamebutafew.Chrysler
oncedifferentiatedtheirproductbyofferinga 7-yearI70,OOO-milewarrantyonnewmod-
els.PepsihasconvincedmallYconsumerstotrytheirproductbecausetheyassertthatit
reallydoestastebetterthanCoke.Offeringproductsata lowerpriceoratseveraldiffer-
entpricescanbear:importanldistinguishingcharacteristic,asdemonstratedbyTimex
watches.
Someproductsareinfactthesame,andattemptstodifferentiatethroughtangible fea-
tureswouldbeeitherfutileoreasiycopied.Insuchcases,animageofuifferenceiscre-
atedtlu'oughintangiblemeansthatmayhavelittletodowiththeproductdirectly. Softdrink
companiesshowyOJhowmuchfunyoucan havebydrinking theirproduct.Beer compa-
niessuggeststatus,enjoyment,andmasculinity.Snapplemaynottastethebestorhavethe
fewestcalories,butmayhavethe funniest,mostmemorablecommercials.Theretendsto
bea heavyemphasisontheuseofmassappealmeansofpromotion,suchasadvertising,
whendifferentiatedthroughintangibles.Notethelong-termuseofBillCosbybyJell-Oto
createanimageoffun.Microsofthassu ccessfullydifferentiateditselfthroughanimage
ofinnovationandexceptionalcustomerservice.
Therearecertainrisksinusingproductdifferentiation.First,a marketerwhouses
productdifferentiationmustbecarefulnottoeliminatementionofcor~appealsor~eatures
that the consumerexpectsfromtheproduct.Forexample. differen:iatinga brandofbread
throughits unique vitaminandmineralcontentisvalida~longasyouretainthecorefresh-
nessfeatureinyourad.Second,highlighting featuresthataretoodifferentfromthenorm
mayproveineffective. Finally,a productmaybedifferentiatedona basisthatis unimpor-
tanttothecustomerordifficultto understand. Theautomobileindustryhaslearnedtoavoid
technicalcopyinad s since most consumersdon't understand it ordon'tcare.
However, thereis a flip-sidetoproductdifferentiation,anapproachtoward themar-
kctcalledmarketsegmentation.^4TheSegmentedMarket
Whilep~oductdifferentiation is aneffectivestrategytodistinguishyourbrandfromcom-
petitors',it alsoclifferentiatesyourownproductsfromoneanother.Forexample, a com-
panysuchasFranco-AmericanSpaghettihasdifferentiateditsbasicproduct byoffering
varioussizes,flav0rs, andshapes.T heobjective istosellmoreproduct,tomorepeople,
moreoften. Krafthas donethe samewiththeirsaladdressings;Xerox withitsmultitude
ofofficeproducts. T heproblemisnotcompetition;theproblemisthe acknowledgement
thatpeoplewithinmarketsaredifferent andthatsuccessfulmarketersmustrespondtcthese
differences.
Thispremiseofsegmentingthemarketther01zesthatpeopleand/ororganizationscan
bemosteffectivelyapproachedbyrecognizingtheiroiffeiencesandadjustingaccordingly.
Byemphasizinga segmentationapproach,theexchangeprocessshouldbeenhanced,since
a companycanmorepreciselymatchtheneedsandwantsofthecustomer.Eventhesoft
drinkmanufacturershavemovedawayfromtheundifferentiatedapproachandhaveintro-
duceddiet,caffeine-free, anddiet-caffeine-freeversionsoftheirbasicpreduct.s
Whileit is relativelyeasytoidentifysegmentsofconsumers,mostfinns donothave
thecapabilitiesortheneedtoeffectivelymarkettheirproduct toallofthesegmentsthat
canbeidentified.Rather, oneormoretargetmarkets(segments)mustbese lected. Inreal-
ity,marketsegmentationis botha disaggregationandaggregationprocess.Whilethemar-
ketisinitiallyreducedtoitssmallesthomogeneouscomponents (perhapsa singleindividual).